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Topic: How I would approach cryptocurrency if I was a bank (Read 337 times)

oaktree (OP)

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How I would approach cryptocurrency if I was a bank

February 21, 2018, 05:46:09 PM

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1. I'd accept that crypto is here to stay and not fight it

2. I'd develop an online wallet service for my account holders. So say Joe Bloggs has a current account and savings account with me. I'd offer to allow him to set up an online cryptocurrency wallet with me as well, linked to his current account. I'd market this as a cryptocurrency savings account. If Joe Bloggs wanted to cash out some of his crypto savings, I'd allow him to sell at the click of a button, with the cash appearing in his current account to use.

3. I'd set up merchant services, so merchants could accept payments in cryptocurrency, bypassing VISA. I'd make sure my fees were lower than VISA's to encourage take up. I'd contact all my existing business customers to alert them to this new service.

4. If I was an international bank I'd move money around internationally between branches using cryptocurrency in order to avoid SWIFT and their fees.

5. I'd offer cryptocurrency loans at competitive interest rates to my best customers.

I'd be making money hand over fist by embracing this brave new world while my competitors were not.

So why arn't the banks doing this? They can save a huge amount by cutting VISA out of the picture. So are they just slow/dinosaurs who can't see the potential profit here?

candy27

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 07:23:15 PM

Haven't you just described what Coinbase is trying to do? Become a bank?

Only they are starting with the cryptocurrency wallets and will likely add current accounts and loans later, after they've floated on the stock market and raised a lot of capital.

I'm surprised the existing banking system can't see what is coming.

kueyen

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 07:51:41 PM

Well as a bank, you sign a bunch of agreements and promise to comply with certain regulations. If a bank decided to use cryptocurrencies to transfer money overseas to decrease SWIFT fees, that bank would be cut off from the international banking system and dollar system overnight. So it's not as simple as you put it.

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Sergey190785

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 07:55:40 PM

I would be very negative about bitcoin if I were a bank! Imagine how much money is lost by parasitic banks, due to the fact that people use bitcoin

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candy27

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 08:25:39 PM

Quote from: kueyen on February 21, 2018, 07:51:41 PM

Well as a bank, you sign a bunch of agreements and promise to comply with certain regulations. If a bank decided to use cryptocurrencies to transfer money overseas to decrease SWIFT fees, that bank would be cut off from the international banking system and dollar system overnight. So it's not as simple as you put it.

Surely if it was a bank like HSBC, with branches everywhere on earth, moving money via cryptocurrency would be easy as it would happen from say HSBC China to HSBC UK. Legally they are separately incorporated banks regulated by the local regulator in each country, but there is nothing stopping them moving money from one to another with cryptocurrency.

kaya11

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 08:49:22 PM

Quote from: oaktree on February 21, 2018, 05:46:09 PM

They just can't man, they would never do that for now. There are a lot of things to consider so it is impossible. It's just like killing yourself that what it is.

Quote from: candy27 on February 21, 2018, 07:23:15 PM

I'm surprised the existing banking system can't see what is coming.

They are afraid of losing a penny, and now if they engage in bitcoin how would they end up losing millions all in just seconds? I bet they would hang themselves.

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Addywealth

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 08:53:23 PM

Quote from: oaktree on February 21, 2018, 05:46:09 PM

Banks are not doing this because of their hidden charges on their customers, anyway if I were a bank I will accept Bitcoin or other Coins as alternative to paper currencies especially for international transaction, I will have ATM for cryptocurrencies too.

Eternu

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 09:35:02 PM

It will not be long before banks start dealing with Bitcoin and maybe other cryptocurrencies as well. I guess they are waiting for crypto regulations from country where they do business. Because of curent (none) regulations, some of things you spoke of are not possible. Also do not forget that banks make a lot of profit, so why would they change something that is good for them.

alyssa85

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 09:38:16 PM

Quote from: Eternu on February 21, 2018, 09:35:02 PM

It will not be long before banks start dealing with Bitcoin and maybe other cryptocurrencies as well. I guess they are waiting for crypto regulations from country where they do business. Because of curent (none) regulations, some of things you spoke of are not possible. Also do not forget that banks make a lot of profit, so why would they change something that is good for them.

Given that Japan and Switzerland are ahead of the rest in legalising and regulating bitcoin, if we see any movement on banks starting to accept crypto it will be in those countries.

Conversely, if the banks there don't accept crypto (don't open wallets etc), then it won't happen anywhere else on earth either.

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Yakamoto

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 09:40:35 PM

#10

Since you're ignoring the fractional reserve lending that banks are able to do with their holdings (even though they rarely have enough to actually pay it back in the same sense) I can't take your post seriously. Banks make money off of taking more than what they have and loaning it out to everyone else. You can't really do that with Bitcoin, or at least not in the same sense since there is actually something that exists that has value and not just a digital number. You can't be a bank on par with what they have going on right now if you don't do FRL, and that is where most of the profits come from.

FRL is possible to do, but it won't really be able to make money unless you're willing to break the Blockchain, for a lack of better terms, and theoretically get rid of the 21m cap.

bitart

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 10:17:09 PM
Last edit: February 21, 2018, 10:46:35 PM by bitart

#11

Quote from: oaktree on February 21, 2018, 05:46:09 PM

....

3. I'd set up merchant services, so merchants could accept payments in cryptocurrency, bypassing VISA. I'd make sure my fees were lower than VISA's to encourage take up. I'd contact all my existing business customers to alert them to this new service.
.........

The current process (which inclueds VISA) has 4 members (2 middlemen).
The payment system is the following:
Customer with debit card -> VISA -> Bank -> Merchant

You say that if you start to use crypto, it will be like this (cheaper, because VISA is off):
Customer with bank's mobile wallet -> Bank's wallet -> Merchant

If you were the Merchant, would you prefer the following?
Customer with mobile wallet -> Merchant wallet
Because this is possible with crypto also, so you don't need the Bank at all, you can cut out 2 middlemen and you can reduce the prices (or gain more profit), because the fees of the middlemen are not applying.
Maybe this is why banks are not happy with crypto

timerland

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 10:41:12 PM

#12

Unfortunately, most of the banks are not trying to do this.

Instead, they are trying to block out all cryptocurrency noise possible. For example, some banks such as Wells Fargo I think have even discriminated against their account holders by not allowing them to send the funds received by selling cryptocurrency.

I think that a lot of corporations already have started to use cryptos, as an investment but not as something they'd use in everyday banking.

Whoever catches on first, will be the future leading of the banking industry. Period.

DarLim11

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 10:52:12 PM

#13

We need to understand why banks are afraid of cyptocurrency and why they don't want to adapt from it.
We all know that one of the feature of cryptocurrency is volatility and that is not good for banks. They start to lose control of the money they have. They can potentially go from rich to bankrupt in an instant if suddenly the masses lose interest from it.
Everyone will have a share of control if the banks will use cryptocurrency.

Imagine building a business without the control would you feel safe to continue it?

Aaarono

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 10:55:12 PM

#14

Quote from: oaktree on February 21, 2018, 05:46:09 PM

It's more complicated than that.
Banks have to comply with the existing regulations of the countries. Crypto will still leave a big hole when it comes about where do the moeny come from.

SUDARMONO

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Re: How I would approach cryptocurrency if I was a bank

February 21, 2018, 11:09:34 PM

#15

It is quite true that if a bank conducting in terms of transactions can certainly benefit greatly, and bank obstacles may still be a lot of negative news about bitcoin, and obstacles from the rules of government rules that apply.

pooya87

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Re: How I would approach cryptocurrency if I was a bank

February 22, 2018, 03:32:02 AM

Merited by darkangel11 (1)

#16

Quote from: candy27 on February 21, 2018, 07:23:15 PM

they most probably see it that is why they are trying to fight it instead.
because they know that those who want to use cryptocurrencies such as bitcoin which are decentralized are using them because they are decentralized and because they don't need a bank for that matter. these people will never use "banks for crypto" no matter what they offer. and in the long run we will have more of this group. so offering such services may not be so profitable for them.

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traderethereum

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Re: How I would approach cryptocurrency if I was a bank

February 22, 2018, 03:36:34 AM

#17

maybe I will learn cryptocurrency for a while until I can see what benefits from cryptocurrency if finally, I am using the cryptocurrency. I will search and use my resource to make research about cryptocurrency and if I can take the benefits, then maybe I will integrate my system to the cryptocurrency although it will need time to test it before I tell to the public that cryptocurrency is a good thing so they can use cryptocurrency too.

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darkangel11

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Re: How I would approach cryptocurrency if I was a bank

February 22, 2018, 07:38:03 PM

#18

Quote from: pooya87 on February 22, 2018, 03:32:02 AM

Quote from: candy27 on February 21, 2018, 07:23:15 PM

That's it. They aren't stupid. They have people that are doing market research and surveys for them. If it was really profitable for them to embrace cryptocurrencies they would, but the risk is greater than the benefits. They'd have to write a lot of new software that most of their people know nothing about, so they'd have to hire some young programmers from the crypto scene, people who they don't know and don't trust. They'd be putting their existing clients at risk by implementing new crypto software that no bank has ever used. And all of it for whom? That 0,5% of the society that is interested in cryptocurrencies? How many of them would actually use the new features like crypto loans? They can get a crypto loan if they want by getting a normal loan and buying cryptocurrency themselves.

oaktree (OP)

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Re: How I would approach cryptocurrency if I was a bank

February 26, 2018, 07:02:25 PM

#19

Quote from: candy27 on February 21, 2018, 07:23:15 PM

Looks like Bitwala is doing just that:

https://www.bitwala.com/bitwala-bank-account-coming-soon/

Quote

In the next few months, we will be building a full-fledged German bank account that will come with a German IBAN, BIC along with a real debit card from MasterCard. Bitwala accounts will be fully regulated by The Federal Financial Supervisory Authority of Germany (BaFin) (current application pending), meaning your funds up to 100,000 will be guaranteed, in our case by the deposit guarantee scheme of German banks.

You will be able to buy and sell cryptocurrencies alongside managing your daily expenses and setting up direct debits.The best of both worlds, all in one place.

The new Bitwala account will come with a debit card that is linked to your account (no more bitcoin prepaid cards!). This means that the balance on your Bitwala account will be immediately available on your Bitwala contactless debit card as well. Having the new card will also mean that you will have much lower fees and higher spending limits. No more top-ups or card loads necessary!

How long before the banks respond in the opposite direction and allow online cryptocurrency wallets linked to your bank acccount?

Washball

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Re: How I would approach cryptocurrency if I was a bank

February 26, 2018, 07:38:15 PM

#20

Banks cannot beat cryptocurrencies, so they will join them. Banks as well as governments see the benefits that come with cryptocurrencies and they will take advantage. They are already implementing the blockchain technology and will develop their own cryptocurrencies.

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